IG probe rejects Keystone allegations

The State Department’s inspector general largely cleared the department on Wednesday of allegations that it had violated its conflict-of-interest procedures when selecting a contractor to analyze the Keystone XL oil pipeline — the latest in a series of defeats for environmental groups fighting a last-ditch effort to block the project’s approval.

Republicans quickly claimed victory.

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“Another day and another government report that finds no reason to continue blocking this common-sense, job-creating project,” Brendan Buck, a spokesman for House Speaker John Boehner, said in a statement. “It’s long past time the president stop pandering to his extremist allies and just approve it so we can get people back to work.”

But anti-Keystone activist Bill McKibben said the findings just underscore the fact that Secretary of State John Kerry and President Barack Obama will need to be the ones to reject the pipeline, which greens consider a threat to the Earth’s climate.

“The real scandal in Washington is how much is legal,” said McKibben, co-founder of the climate group 350.org. “This process has stunk start to finish. It’s good that its now in the hands of the Secretary Kerry and President Obama so there’s at least an outside chance of a decision not based on cronyism.”

Obama has yet to say whether he favors or opposes the pipeline, but he is expected to make a decision within the next few months.

The IG launched its investigation after environmentalists alleged that the contractor, Environmental Resources Management, had failed to fully disclose its ties to the oil industry and other interests that would benefit if the Obama administration approves the Alberta-to-Texas oil pipeline.

Greens also contended that the department failed to vet the company closely enough before hiring it to work on a sweeping study of Keystone’s environmental impact.

But after reviewing documents and interviewing State Department officials, the inspector general’s office found that the department had followed its prescribed vetting process — “and at times was more rigorous than that guidance.”

The IG also “found that the process the Department used to assess organizational conflicts of interest was effective in that (i) a reasonable review was undertaken to independently evaluate ERM’s certification that it had no conflict of interest and (ii) the process achieved its intended result,” the report continued.

But the report offers small amounts of ammunition for Keystone critics, saying it found room for improvement in “the process for documenting the contractor selection process, including the conflict of interest review.”

Current regulations and guidelines require little documentation, the report says. While the State Department met those guidelines, it “did not fully document its process, and additional documentation would help ensure effective management and oversight of this process.”

In addition, the report says the State Department’s “public disclosures concerning its conflict of interest review could be improved.”

Wednesday’s report is a follow-up to a February 2012 inspector general investigation that found no evidence of a conflict of interest or bias in the department’s analysis of the pipeline. The 2012 report largely dismissed allegations that activists had lobbed at Cardno ENTRIX, a previous outside contractor that worked on a separate environmental analysis of the pipeline.